In other words, it’s very likely you love Google, or are at least fond of Google, or hardly think about Google, the same way you hardly think about water systems or traffic lights or any of the other things you rely on every day. Therefore you might have been surprised when headlines began appearing last year suggesting that Google and its fellow tech giants were threatening everything from our economy to democracy itself. Lawmakers have accused Google of creating an automated advertising system so vast and subtle that hardly anyone noticed when Russian saboteurs co-opted it in the last election. Critics say Facebook exploits our addictive impulses and silos us in ideological echo chambers. Amazon’s reach is blamed for spurring a retail meltdown; Apple’s economic impact is so profound it can cause market-wide gyrations. These controversies point to the growing anxiety that a small number of technology companies are now such powerful entities that they can destroy entire industries or social norms with just a few lines of computer code. Those four companies, plus Microsoft, make up America’s largest sources of aggregated news, advertising, online shopping, digital entertainment and the tools of business and communication. They’re also among the world’s most valuable firms, with combined annual revenues of more than half a trillion dollars.
The recent focus on technology companies when it comes to corporate power is definitely warranted, but I do find it a little peculiar that it, at the same time, draws attention away from other sectors where giant corporations are possibly doing even more damage to society, like large oil companies and the environment, or the concentration of media companies.
One has to wonder if the recent aggressive focus on tech companies isn’t entirely natural.
Microsoft was a monopoly when it used its Windows licensing power to prevent every OEM in the world from installing any OS besides Microsoft Windows. That was 100% restraint of trade and they deserved to be broken up for doing it.
I just can’t see how Google is a monopoly. There is nothing stopping anyone from setting up a competitor to Google. Of course it may be hard to get people to pay attention to you, but that is a marketing problem not a legal one. There are no ‘licenses’ in place stopping people from using a competing search engine. There were licenses restricting Microsoft’s OEMs.
Another point for the people complaining about what Google does with the info on their websites. You are 100% in control of what Google indexes on your site. If you don’t like what Google is indexing, set a robots.txt to stop them. I get annoyed when Getty thinks it has a ‘right’ to piles of free traffic from Google and then they go even further and try and to dictate how Google should collect that free traffic for them. You are a fool if you build a business around Google giving you free traffic.
You can try arguing monopoly extension against Google when it enters the verticals, but again I don’t see it. Monopoly extension is where the ownership of one monopoly is used to force people into another one. But no one is forced into using a Google vertical, Google may make it very easy for you but that is not the same as forcing you to do it.
I also believe the huge EU fine against Google over this is ridiculous. The owners of Foundem seem to think that they have a ‘right’ to pile of free referral traffic from Google and no such right exists. I suspect the EU’s actions will simply destroy all third party shopping engines and basically guarantee that Amazon will own the EU shopping market. It is pretty much already that way in the USA.
So what do the anti-trust lovers want to do to Google? Prevent them from building any kind of vertical search engines? What would be the legal grounds for making a ruling like that?
BTW, I think the technology that will displace Google in search is already under development. It is AI processing of the web to extract the concepts contained in a web page instead of just keywords. Once something like that works well, the whole category of vertical search will likely disappear. Maybe Google will win two generations in a row (like Microsoft did – command line, GUI) but that is a rare occurrence. More likely some new startup will figure it out, then we’ll see if they sell out or stay independent.
jonsmirl,
I do agree with you that things could be many times worse if google were to use microsoft’s old tactics, but this doesn’t have any bearing on whether or not it is a monopoly. You focus on what I’ll sum up as “benevolence”, but it should be pointed out that technically it is not mutually exclusive with being a monopoly. In other words, one can legally be a monopoly regardless of whether one engages in anti-trust practices.
Another point would be that end users whose perspective you highlight are just a single facet of the google monopoly; they do not reflect the full scope of google’s monopoly power.
Edited 2018-02-22 02:44 UTC
That is the difference between EU monopolies and USA monopolies. The EU will categorize someone as a monopoly even if they aren’t erecting barriers to protect the monopoly. USA monopolies have to engage in the construction of barriers before they get punished.
I don’t subscribe to the EU view. I don’t believe simply having a high market share should be a crime. The crime is in erecting the barriers to keep competitors out.
In general I view the complaints toward Google as competitors trying to force Google to help them. For example if Google was going to all of the stores and making them sign contracts saying that they would exclusively offer their goods on Google and not on Foundem, that is monopolistic and should be punished. But if Foundem is arguing that Google has a high share and it should send Foundem free traffic to help them compete, in the USA that would considered ridiculous. Apparently the EU views otherwise.
From my perspective the EU really screwed up on this one. Google was actually helping EU retailers stay visible and make sales. Google was not charging them an affiliate kickback. Foundem on the other hand makes all of their profit from affiliate kickbacks.
The EU’s actions have ensured Google is not going to put much effort into vertical shopping engines going forward. I believe the main effect of that is that Amazon will end up dominating EU shopping. I think the EU was very flawed when they ruled that Amazon was not a competitor to Google shopping.
I suspect in five years the EU will look like the USA. Here Google shopping is a joke and Amazon rules retail. And all of the local stores are dying. Check out the total collapse of shopping malls in the USA.
Edited 2018-02-22 02:59 UTC
jonsmirl,
Not necessarily. The thing is capitalism relies on two, sometimes conflicting, foundations. A free market, and competition. They can conflict because a totally free market will often result in monopolies/oligopolies at the top controlling the majority of the market, which is to the detriment of healthy & viable competition.
Therefor, unless we want to end up in an end game where a few individuals/companies control everything, then we need to shift our attention to the other tenant of capitalism, namely competition. We should strive to achieve a balance, ideally with more than just one or two companies controlling the top 90%. It turns out though that this is extremely difficult to achieve not only because of free market concerns, but also because the less competition there is, the stronger the consolidation of power becomes, which means that if there isn’t adequate protection for competition over time, then even more interference will eventually be required to correct it in the future.
In any case, US leaders are not willing to tackle market consolation. So for better or worse, I predict things overall to get less competitive over time. This means that for future generations, capitalism isn’t going to be as rewarding as it’s been for past generations.
In the EU a company with a ‘dominant share’ is not allowed to ‘distort’ the market. The EU concluded that Google was distorting the vertical search engine market.
By their reasoning Google has a dominant share on general search. They determined that vertical search engines were dependent on general search and being denied unrestricted access to it. So they fined Google billions and made then give access to the vertical search engines.
Two issues I have with that:
1) The conclusion that vertical search was dependent on access to general search. The continuous ads I see on TV for Trivago are pretty good proof that general search access is nice free marketing, but not a required input.
2) The fact that the EU excluded places like Ebay and Amazon from their definition of vertical shopping search engines. If you include sites like this Google shopping does not have a dominant share.
Finally I think it is utterly ridiculous to fine a company $2.7B over the design of a web page.
And again, this is the same in the USA.
The differences between the USA and the EU are in the details. The USA is mainly concerned with monopolies (1 company > 50%) while the EU is mainly concerned with “considerable marketpower” (3 companies, all 30%)
Another detail is that the USA is mostly concerned with protecting companies from other companies while the EU is more concered with protecting consumers from companies.
These topics are extremely difficult to summarize and there are many exceptions so please consider the above just the outlines.
The most important difference that I see in reality is that it is very rare for the USA to do something against big corporations while the EU seems to have less hesitation to do so.
I believe it is the opposite of this. That was a main point in the original article — it is difficult to accuse Google of anti-trust in the US if you can’t demonstrate consumers are being harmed.
Note — in the Microsoft case it was utterly obvious that consumers were being harmed. At one point I had 32 unwanted copies of Windows that I had been forced to buy with PCs that were used for other operating systems. I refused to agree to the EULA on all of them but of course Microsoft would not give a refund. At that point in time the only way to get a refund was to take Microsoft to small claims court.
The EU action against Google was the opposite of this. There was no evidence of consumer harm, consumer prices were actually lower on Google shopping. This was 100% about Google’s impact on other companies.
And as to that impact, I think the EU’s first made the decision to extract a few billion out of Google and then made up some flimsy arguments to support that preordained decision. It it total manure that they defined the market to exclude Ebay and Amazon from the competitive analysis.
Edited 2018-02-22 16:44 UTC
Doesn’t your Microsoft example prove exactly that USA doesn’t do anything when consumers are being harmed while the EU did? In the EU consumers could just refuse the EULA and get their money back and Microsoft was forced to include Browser-choice screens and have “N” versions while the USA just let Microsoft do whatever they wanted because no other OS-company was getting hurt (there were none).
When Google included the “All or nothing” Android clauses* the EU stepped in again while the USA didn’t do anything
(* from memory about those all or nothing Android clauses)
* If an OEM puts Android on some of their phones they have to put it on all of their phones
* If an OEM wants to include 1 Google PlayStore App they have to include all PlayStore Apps
Of course the EU and the USA also have protectionist measures to protect the market in its entirety and that is why Google got punished by the EU in the shopping example.
Now that I look at all these examples, it just looks like it is just the EU fining USA-companies but that isn’t the case. The EU also fines EU-companies and sometimes the USA actually fines a USA-company (or bans a Chinese company)
Microsoft was found guilty of anti-trust. They used their immense power to buy off part of the government and arranged to get no penalty for being found guilty. That is not how things were supposed to work.
Your memory is not quite right on the Android thing. First there are no restrictions on shipping Android. Android is open source and anyone can ship it that follows the open source licenses (like GPL and Apache). Samsung ships both Android and Tizen. Amazon ships FireOS which is Android renamed.
What is licensed is Google Play services(GPS). GPS is not required to make Android run, it is an apk install. For example FireOS does not use GPS.
GPS is an all or nothing deal. If you are going to license it (License is free) you have to ship all of it. So location services, google pay, play store, gmail, etc. But… a GPS license does not prevent you from installing your own versions of the GPS apps too. The GPS license just prevents you from removing the Google versions. Samsung ships parallel versions of almost every app in their phones.
There is a current anti-trust action in the EU saying that forcing all pieces of GPS to be installed is anticompetitive. The poster child for this is a company that makes location services and wants to replace the location service inside GPS. That may sound like a reasonable thing, but it is a legal strawman hiding the real motivation of the companies pushing this anti-trust case.
Their true motivation is to get a ruling saying that pieces of GPS can be replaced. Then they intend to set up competing app stores (filled by copying all of the apps in Google’s store). This will allow them to capture all of the app store revenue from those phones. Similarly they want to replace the advertising engine inside of Android so that all of the advertisements come from their ad network.
So you can see the problem here. These actors want to steal all of the revenue out of an Android phone while leaving Google with the expense of building the entire ecosystem.
There is a fair way to do this, one which Amazon followed with FireOS. Amazon has their own play store and their own GPS equivalent. Amazon has to bear the burden of supporting this whole ecosystem, but they also get the revenue from it. Note that there is nothing stopping anyone in the EU from pursuing this route.
If the EU anti-trust against Android prevails, I don’t know what will happen to Android in Europe. Likely it will descend into a bloated, chaotic, non-functioning mess where everyone complains to Google about problems that Google did not cause. It is extremely unlikely that consumers will benefit from this ruling even if the EU claims that they will.
jonsmirl,
The same is true of almost every business in existence. A restaurant owner might gripe that the new guy on the opposite corner is going to steal his customers when it was his advertising and money that brought them to that spot to begin with. All of us who are in business face this in one way or another, we have to accept the competitive realities when we go into business. Google managed to kill yahoo’s business, if someone manages to kill google’s business, then so be it. Google doesn’t deserve exceptional treatment just because something might threaten to compete with their business.
Edited 2018-02-23 18:35 UTC
In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power. (source https://en.wikipedia.org/wiki/Monopoly)
Now if I use google and start typing “other search” it autocompletes to:
* other search engines
* other search engines besides google
* other search engine than google
* other search engines better than google
* other search engines not google
(If I use bing.com and start typing “other search” it just autocompletes to “other search engines” and the first result that shows up is duckduckgo)
Are you kidding me? The two largest search engines in the world are Google and Youtube (yes youtube can be considered a search engine as it has the world’s largest library of videos).
Vid.me such down late last year because it pretty much impossible to turn a profit with video site due to the storage cost of video. The other video sites basically aren’t anywhere near as decent
To start a search engine these days again is a mammoth task because it isn’t like the 1990s where you can have a couple of SQL Databases and half decent search box to find sites. I’ve build a web crawler with elastic search, but anything past that requires some serious engineering which will require probably at least a few million to get anything that is half as good as duck duck go which while decent isn’t half as good as google.
Then you have Google Maps, they basically have a monopoly on mapping (I work for a company that does a lot of work with Geo).
Almost every phone coming out is Android with their services.
coherence,
I agree. It’s extremely difficult. Even if you do build something better in some way, it may not matter at all since you don’t have the users to go along with it and don’t have the benefit of bundling your search engine within products like google and microsoft do.
Vimeo is quite good at what it is, and at least it seems to be doing fine…
A monopoly doesn’t mean that they are forcing companies not to install an OS or use a search engine, it simply means that the large size of said organization makes it a very powerful defacto that can damage a market with very little effort. This applied to Microsoft and now applies to Google.
That said I don’t think that breaking Google up is the answer here since the benefit of Google is actually its size. Still mandating that Google follow a different approach to showing search suggestions than choke traffic to a website when the website is negatively affected is necessary. The options that Google gives of either Google showing whatever it wants on a search page or obliterate said website from its search seems like abuse of power to me. You’re either with Google or Google is against you.
This quote out of the article made me chuckle, in that I cannot relate to it at all. I’ve long been critical of the power that the tech companies wield over us. Also, I actually do think about the technology behind everyday mundane items. I get the impression this author hasn’t socialized with many in the tech community, “nerds” as he calls us, otherwise he should have known that none of this is news within the industry…but maybe I/we are outliers?
Yeah, I’m pretty much done with Google. I moved away from all of their services and I am encouraging everyone I know (and mostly successful) to do so.
It’s a bit hard for some services (translate for example) that some people might need, just because there’s no alternative with the feature set, but even then, I’d still encourage people to use a dictionary instead, if possible (Some dictionary apps are pretty dang good).
I’ve blocked as much of google as I can on my firewall but increasing numbers of sites just won’t work anymore without your life being sucked away to the Chocoloate Factories mega AI.
As I hate ALL Advertising especially those so called targetted ads I refuse to use them for searches without an anonymiser in the way.
As for Amazon… I avoid them as much as possible as well.
Those “13 russian hackers” was that big of a deal to the election?
The only candidates that had “the russians on their side” as the investigation showed was Hillary. CNN gone big goofy shut about it after reporting on russian intervention in the election non-stop for 12 months.
I completely agree with Thom’s conclusion here. That is all.
Everybody knows Google, Apple, Amazon and so on. They are multinational, global super corporations.
‘Big pharma’ and ‘big oil’ et al. operate mostly on US soil and the media outside the USA doesn’t even recognize the names of these companies even if some of them affect the whole world (like oil does).
Also, their products are tangible and much more dependent on state-level regulation and therefore the issues, I guess, are more often than not limited to a couple states and do not garner all that much attention from the media nationwide.
Edited 2018-02-22 09:35 UTC
https://en.wikipedia.org/wiki/Big_Oil, first line, “Big Oil is a name used to describe the world’s…”. You realize that one of them is Royal Dutch Shell, with the word Dutch in it quite literally. Another one is BP with the word British quite literally in there. Thinking that these companies operate mostly on US soil and that the rest of the world doesn’t know about Exxon Mobile or BP is ridiculous. “Exxon Valdez” and “the BP oil spill” anybody?
But you know, if you look at Amazon vs. Google, it doesn’t look all that good for Google.
My guess is that the letters G-O-O-G-L-E will drop out of the Alphabet.. well at least as far as Amazon sees it.
I suspect this is, in large part, because Google and Facebook are more directly a part of peoples everyday life now. Most people can’t get through a single day without directly interacting with Facebook or Google in some way, so the societal influence is more visible and apparent to everyone. Oil, pharma, and agriculture (Monsanto, etc.) companies, on the other hand, have been manipulating economies and governments behind the scenes for decades now but it happens on a much “grander” scale where the effects are broader and more prolonged so it’s harder to see their impact until way after the fact. While the massive data mining and AI capabilities of Google and Facebook are operating behind the scenes in a similar way, people aren’t reacting tho that in an immediate way, only after it’s been happening for a while and the damage is well under way. Because of the public facing visibility of them though, I suspect it makes it easier for users / consumers (or which are really Google and Facebook’s products) to focus on the companies at all, and then make to trasition to focusing on thier behind the scenes activities.
For instance, Facebook rolls out a new feature, and within days everybody is using it and is talking about how it affects the way they interact with and use Facebook. That primes the mental conversation to also talk about Facebook’s larger impact. Now say Monsanto changes a gene in their soybean seed. They don’t promote it or publicize; they just start using it. Then 2y go by, and independent farmers all across the country now learn their fields are fallow unless they use Monsanto seeds because of some “invasive” side effect introduced by Monsanto 2y ago. There’s no “priming the pump” for a conversation about Monsanto though since people don’t think about Monsanto and thier products affecting thier every day lives.
I can’t deny that the conclusion you make at the bottom of the excerpt makes sense, but it so happens that Google has been the target of the EU for a long time as well. It may be either a distraction from the fossil fuel industry or that something is happening in the USA. The Trump administration may have an axe to grid with Google, maybe.